After Loki cuts off Sif's hair, he is forced to fetch the gods' treasures from the dwarfs: the sons of Ívaldi forge the golden hair, Skíðblaðnir and Gungnir; Brokkr and Sindri make Draupnir, the golden boar Gullinbursti and Mjöllnir. Þórr's hammer is judged best — Loki loses the wager but wriggles free, and has his mouth sewn shut with the thong Vartari.
Hví er gull kallat haddr Sifjar? Loki Laufeyjarson hafði þat gert til lævísi at klippa hár allt af Sif. En er Þórr varð þess varr, tók hann Loka ok myndi lemja hvert bein í honum, áðr hann svarði þess, at hann skal fá af Svartálfum, at þeir skulu gera af gulli Sifju hadd þann, er svá skal vaxa sem annat hár. Eftir þat fór Loki til þeira dverga, er heita Ívaldasynir, ok gerðu þeir haddinn ok Skíðblaðni ok geirinn, er Óðinn átti, er Gungnir heitir.
Why is gold called Sif's hair? Loki Laufeyjarson had done this out of malice, cutting off all of Sif's hair. And when Þórr became aware of it, he seized Loki and would have broken every bone in him before he swore that he would get the dark elves to make for Sif a hair of gold that would grow like any other hair. After that Loki went to the dwarfs called the sons of Ívaldi, and they made the hair and Skíðblaðnir and the spear that Óðinn owned, which is called Gungnir.
Þá veðjaði Loki höfði sínu við þann dverg, er Brokkr heitir, hvárt bróðir hans, Sindri, myndi gera jafngóða gripi þrjá sem þessir váru. En er þeir kómu til smiðju, þá lagði Sindri svínskinn í aflinn ok bað blása Brokk ok létta eigi fyrr en hann tæki þat ór aflinum, er hann hafði í lagt. En þegar er hann var genginn ór smiðjunni, en hinn blés, þá settist fluga ein á hönd honum ok kroppaði, en hann blés sem áðr, þar til er smiðrinn tók ór aflinum, ok var þat göltr, ok var burstin ór gulli. Því næst lagði hann í aflinn gull ok bað hann blása ok hætta eigi fyrr blæstrinum en hann kæmi aftr. Gekk hann á braut. En þá kom flugan ok settist á háls honum ok kroppaði nú hálfu fastara en áðr, en hann blés, þar til er smiðrinn tók ór aflinum gullhring þann, er Draupnir heitir. Þá lagði hann járn í aflinn ok bað hann blása ok sagði, at ónýtt myndi verða, ef blástrinn felli. Þá settist flugan milli augna honum ok kroppaði hvarmana, en er blóðit fell í augun, svá at hann sá ekki, þá greip hann til hendinni sem skjótast, meðan belgrinn lagðist niðr, ok sveipði af sér flugunni, ok þá kom þar smiðrinn ok sagði, at nú lagði nær, at allt myndi ónýtast, er í aflinum var. Þá tók hann ór aflinum hamar. Fékk hann þá alla gripina í hendr bróður sínum Brokk ok bað hann fara með til Ásgarðs ok leysa veðjunina.
Then Loki wagered his head with the dwarf named Brokkr, whether his brother Sindri would make three treasures as good as these. And when they came to the smithy, Sindri laid a pig-skin in the forge and told Brokkr to blow and not to leave off until he took out of the forge what he had put in. But as soon as he had gone out of the smithy, and the other was blowing, a fly settled on his hand and stung; yet he blew as before, until the smith took out of the forge what proved to be a boar with bristles of gold. Next he laid gold in the forge and told him to blow and not to stop blowing until he came back. He went away. Then the fly came and settled on his neck and stung now twice as hard as before, but he blew until the smith took out of the forge the gold ring called Draupnir. Then he laid iron in the forge and told him to blow, and said it would come to nothing if the blowing failed. Then the fly settled between his eyes and stung his eyelids, and when the blood ran into his eyes so that he could not see, he snatched at it as fast as he could while the bellows sank down, and swept the fly off himself; and just then the smith came and said that it had come near to everything in the forge being spoilt. Then he took a hammer out of the forge. He put all the treasures into the hands of his brother Brokkr and told him to go with them to Ásgarðr and settle the wager.
En er þeir Loki báru fram gripina, þá settust æsirnir á dómstóla ok skyldi þat atkvæði standast, sem segði Óðinn, Þórr, Freyr. Þá gaf Loki Óðni geirinn Gungni, en Þór haddinn, er Sif skyldi hafa, en Frey Skíðblaðni ok sagði skyn á öllum gripunum, at geirrinn nam aldri staðar í lagi, en haddrinn var holdgróinn, þegar er hann kom á höfuð Sif, en Skíðblaðnir hafði byr, þegar er segl kom á loft, hvert er fara skyldi, en mátti vefja saman sem dúk ok hafa í pungi sér, ef þat vildi.
And when Loki and he brought forward the treasures, the Æsir took their seats on the judgment-thrones, and the verdict was to stand that Óðinn, Þórr and Freyr should give. Then Loki gave Óðinn the spear Gungnir, and Þórr the hair that Sif was to have, and Freyr Skíðblaðnir, and explained the virtues of all the treasures: that the spear never stopped in its thrust; the hair grew to the flesh as soon as it came onto Sif's head; and Skíðblaðnir had a fair wind as soon as its sail was raised, wherever it was to go, and could be folded together like a cloth and kept in one's pouch if desired.
Þá bar fram Brokkr sína gripi. Hann gaf Óðni hringinn ok sagði, at ina níundu hverja nótt myndi drjúpa af honum átta hringar jafnhöfgir sem hann. En Frey gaf hann göltinn ok sagði, at hann mátti renna loft ok lög nótt ok dag meira en hverr hestr ok aldri varð svá myrkt af nótt eða í myrkheimum, at eigi væri ærit ljós, þar er hann fór; svá lýsti af burstinni. Þá gaf hann Þór hamarinn ok sagði, at hann myndi mega ljósta svá stórt sem hann vildi, hvat sem fyrir væri, at eigi myndi hamarrinn bila, ok ef hann yrpi honum til, þá myndi hann aldri missa ok aldri fljúga svá langt, at eigi myndi hann sækja heim hönd, ok ef þat vildi, þá var hann svá lítill, at hafa mátti serk sér. En þat var lýi á, ar forskeftit var heldr skammt.
Then Brokkr brought forward his treasures. He gave Óðinn the ring and said that every ninth night eight rings as heavy as itself would drip from it. And to Freyr he gave the boar and said it could run over air and sea, night and day, faster than any horse, and it never grew so dark by night or in the worlds of darkness that there was not light enough where it went, so did its bristles shine. Then he gave Þórr the hammer and said he would be able to strike as great a blow as he wished at whatever was before him, and the hammer would not fail; and if he threw it at anything, it would never miss and never fly so far that it would not come back to his hand; and if he wished, it was so small that it could be carried inside his shirt. But it had one flaw: the fore-shaft was rather short.
Þat var dómr þeira, at hamarrinn var beztr af öllum gripunum ok mest vörn í fyrir hrímþursum, ok dæmðu þeir, at dvergrinn ætti veðféit.
That was their judgment, that the hammer was the best of all the treasures and the greatest defence against the frost-giants, and they judged that the dwarf owned the wager-stakes.
Þá bauð Loki at leysa höfuð sitt, en dvergrinn sagði, at þess var engi ván.
Then Loki offered to redeem his head, but the dwarf said there was no hope of that.
"Taktu mik þá," kvað Loki, en er hann vildi taka hann, þá var hann víðs fjarri. Loki átti skúa þá, er hann rann á loft ok lög.
»Take me, then,« said Loki; but when the dwarf tried to take him, he was far away. Loki had those shoes with which he ran over air and sea.
Þá bað dvergrinn Þór, at hann skyldi taka hann, en hann gerði svá. Þá vildi dvergrinn höggva af höfuð hans, en Loki sagði, at hann átti höfuðit, en eigi hálsinn. Þá tók dvergrinn þveng ok kníf ok vill stinga rauf á vörrum Loka ok vill rifa saman munninn, en knífrinn beit ekki. Þá mælti hann, at betri væri þar alr bróður hans, en jafnskjótt sem hann nefndi hann, þá var þar alrinn, ok beit hann varrarnar. Rifaði hann saman varrirnar, ok reif Loki ór æsunum. Sá þvengr, er muðrinn Loka var saman rifaðr, heitir Vartari.
Then the dwarf asked Þórr to take him, and he did so. Then the dwarf wanted to cut off his head, but Loki said he owned the head but not the neck. Then the dwarf took a thong and a knife and wants to pierce holes in Loki's lips and to sew the mouth shut, but the knife would not cut. Then he said his brother's awl would be better there, and as soon as he named it, the awl was there, and it bit the lips. He sewed the lips together, and Loki tore them out of the seams. The thong with which Loki's mouth was sewn shut is called Vartari.